Reborn Xiangjiang as a Tycoon

Chapter 68 Leveraged Financing

"Mr. Thomas, I have one more thing I want to ask you this time."

Lin Baicheng said aloud: "I am going to do gold futures trading. I would like to ask, Goldman Sachs should provide leverage business, right?"

"Of course, this is one of our main businesses at Goldman Sachs."

Wade Thomas immediately replied. Although he felt that the possibility that the amount of leverage financing required by Lin Baicheng exceeded his authority was very low, he still asked: "Mr. Lin, how much capital are you planning to use for futures trading? How many times the leverage is needed?

?”

"One hundred million dollars, five times leverage."

Before coming to the United States, Lin Baicheng had already calculated the funds he could currently use and how much money he would use to buy long gold futures. The funds he now has can be divided into two parts, one is the US$100 million loan from Goldman Sachs;

In addition, the remaining funds from the sale of Wharf stocks and the remaining funds of the company totaled nearly 400 million Hong Kong dollars.

Lin Baicheng plans to spend 100 million Hong Kong dollars to slowly acquire Hutchison Whampoa's shares, and then the acquisition of Li TV should also cost 100 million Hong Kong dollars. The upfront capital for the development of game consoles should be 100 million Hong Kong dollars for the time being. In this way, Lin Baicheng can use

There is not much money to go long gold futures.

Lin Baicheng decided to use the US$100 million loan from Goldman Sachs to go long gold futures, using five times the leverage.

Using a leverage of five times and using US$100 million as margin, as long as the gold does not fall below 80% of the purchase price, that is, the loss does not reach 20%, Lin Baicheng's gold futures position will not be liquidated.

Lin Baicheng doesn't know how big the trading volume of gold futures is in this era, but he thinks there should be trillions of dollars in trading volume. With such a large trading volume, he doesn't have to worry about someone hunting for his funds. With hundreds of billions of dollars,

The funds suppressed the price of gold and consumed Lin Baicheng's long futures position. Even if he thought about it, it would be impossible.

And if the gold price slowly falls, Lin Baicheng only needs to replenish the margin before the gold price falls below 80% of the cost price and the loss reaches 20%, and he does not have to worry about a sudden liquidation of the position resulting in a total loss of 100 million US dollars.

Lin Baicheng is very sure that the overall gold price will show an upward trend in the next few years. As long as there are no problems in the first few months to half a year, there will be no problems in the future. Just wait for the gold price to rise.

In fact, Lin Baicheng thought about using ten times leverage at first, but the loss ratio of 10% was still too low. He was worried that he would be unlucky and buy when the gold price adjusted and fell, and then he could not get the margin temporarily, resulting in no money made but losses.

100 million US dollars, that's a huge loss.

The risk of ten times leverage was too high, so Lin Baicheng finally chose five times leverage, a number that was neither high nor low.

"One hundred million dollars, five times leverage? Yes, no problem!"

When Wade Thomas heard this, he nodded and agreed without thinking. The financing amount did not exceed the billion-dollar limit under his authority, so he could directly make the decision.

"Mr. Lin, how long do you plan to finance? The longer the financing time, the lower the interest rate of financing. The minimum time is one month."

"Can you tell me more specifically? For example, what is the interest rate for one-month financing, what is the interest rate for three-month financing, and what is the interest rate for half-year financing?"

"Of course you can! If you finance for one month, the interest will be calculated at an annual interest rate of 15%; if you finance for three months, the interest will be calculated at an annual interest rate of 14%; if you finance for half a year, the interest will be calculated at an annual interest rate of 12%; if you finance for one year, the interest will be calculated at an annual interest rate of 12%.

Calculating interest at 10%, the interest rate for one-year financing is the lowest.”

No matter how long the financing period is, the interest rate is higher than that of bank loans. This is normal because bank loans require collateral, but leverage financing does not. The collateral is actually the futures and margin purchased with leverage financing.

"I'll raise money for half a year first."

Although the interest rate for one-year financing is lower, Lin Baicheng is not sure whether he will use the money later. One year is too long, so he can only choose to pay more interest.

Financing US$500 million, the financing period is half a year, the interest rate is 6%, which means US$30 million in interest. If Lin Baicheng's futures investment cannot earn more than 6% profit within half a year, then he will lose money.

In addition, the US$100 million itself is a loan, and the loss will only be even greater after interest is included.

"As for financing, Mr. Lin, whenever you have time, you can contact me at any time. Once we sign the contract and your funds are transferred to the fixed account, our Goldman Sachs funds will be given to you immediately."

This was another big deal, and Wade Thomas was very happy.

"I will have someone send the funds to the United States. I will contact you again, Mr. Thomas, in a day or two."

Lin Baicheng nodded. He did not bring any funds with him when he came here this time, but as long as he contacted Xiangjiang, US$100 million in funds could be transferred at any time.

"On the contrary, I hope Mr. Thomas will not forget about investing in Microsoft and Apple. You'd better give me good news in the next few days. I won't be able to stay in the United States for too long."

"Mr. Lin, don't worry, there will definitely be good news within a week."

Wade Thomas was confident that he would handle the matter of investing in Microsoft and Apple within three to five days, but he did not go too far. After all, no one could guarantee that there would be no surprises.

"That's good."

Lin Baicheng nodded.

Afterwards, Lin Baicheng and Wade Thomas chatted for a while, then said goodbye and left to go to the branch of Galaxy Games.

In the afternoon of that day, Eric Davis signed a contract for 10,000 "Xiangjiang Cube" arcade machines on behalf of the American branch of Galaxy Games and Phil Smith's Phil Trading Company. Phil Smith paid US$14 million that day.

of payment.

Of the $14 million payment, Lin Baicheng transferred $10 million to his personal account in the United States, and the remaining $4 million was left in the branch account.

Because the game is an agent for sales, the branch office has basically nothing to do except keeping in touch with agents in Western countries. It can be said that it is quite leisurely.

This time, Lin Baicheng left 4 million US dollars in the company's account. He asked Eric Davis to first find a store in a good location in Los Angeles to buy it. After renovation, it could be used to sell toys, game consoles and other products that may appear in the future.

Other peripheral products are operated as directly operated stores.

Although Galaxy Games currently has nothing to sell, the store can be opened first, and it will be used as a real estate investment anyway, and it can also train some employees.

Eric Davis was very happy to accept the task assigned by Lin Baicheng. Doing nothing was not what he wanted, which meant that the branch was not important at all, and naturally he, the person in charge of the branch, was not important either.

Only when the company's assets in the United States increase, its business increases, and its status improves, Eric Davis, the person in charge of the branch, will rise.

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(End of chapter)